Eskom unable to meet S.Africa's power needs from 2011

South Africa needed to focus on energy efficiency because Eskom would not be able to meet demand for electricity from 2011, the state-owned company said in a presentation yesterday.  “We do not have enough capacity to meet requirements,” said Brian Dames, Eskom’s chief operating officer for generation.  “The country has to focus on how do we reduce our energy usage. We cannot be in a position where electricity constrains economic growth.” 

Electricity shortages caused blackouts and a temporary halt to production at the country’s mines in 2008, after the government had halted expansion at Eskom in 2004. 

The parastatal should be able to meet peak demand of 37.24 gigawatts during the World Cup, said Erica Johnson, the head of its customer network business. 

Still, Eskom had asked customers to reduce some demand during the event, she said.  “Moderate” energy demand growth would require an annual increase of about 3 percent in generating capacity, Eskom executives said. 

Eskom, which provides 95 percent of South Africa’s power, said in December that even with 35 percent annual tariff increases over the next three years it would fall about R30 billion short of the financing needed for its expansion. 

Regulators allowed the company to increase its fees by 24.8 percent from April, 25.8 percent next year and 25.9 percent the year after that.  The Kusile power plant, which was delayed last year due to funding problems, and the Medupi power station had to be completed if demand was to be met, said Johnson. 

“Inevitably there is going to be a much, much larger funding deficit going forward,” Public Enterprises Minister Barbara Hogan said on Monday.  “We are definitively reaching a stage now where we cannot rely on Eskom to be the single source of energy for the country.”

Source: Bloomberg, 20100303

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